When faced with the prospect of losing nearly $1.5 million in revenue, the Village of Tinley Park, IL, opted to replace its existing mechanical meters with smart meters that use fluidic oscillation technology.
Sand, grit and air can cause degradation in accuracy of mechanical meters. Such degradation has been established in areas where the quality of water is high. However, the loss of accuracy occurs significantly faster when water from boreholes or where sugar sand, a fine silt found in states including Florida, New Jersey, Michigan and California, is commonplace. This loss of accuracy begins soon after installation and can result in progressively large losses in revenue for water utilities.
As an alternative to mechanical meters, more and more water authorities worldwide are using alternative metering technology to combat revenue loss and meter malfunction. One such advancement in metering design incorporates fluidic oscillation technology. This design overcomes the problems caused by particulates that often plague conventional mechanical meters. With no moving parts, this novel design ensures metered flows and income remain accurate over the entire product lifetime.
Tinley Park, which receives its water supply from Lake Michigan – high quality water that is low in particulates – conducted a cost benefit analysis of its system. Using theoretical data to reflect anticipated lost revenue over a three-year period from the Village’s nearly 14,000 mechanical meters, a minimum total loss of revenue was projected at over $1.4 million – more than the cost to replace all of its meters.
The Village elected to replace the entire installed base of mechanical meters with SmartMeter™ water meters from Severn Trent Services over the following three years. Tinley Park placed an initial order for 5,000 intelligent meters. Feedback from the Village indicated the meters were performing well.
A few years after the initial installation, the Village undertook a detailed cost benefit analysis to decide what should be done with the remaining installed base of meters, which required replacement. This consisted of two activities: a theoretical calculation of the loss of revenue from the mechanical meters, and an analysis of the actual earning performance of SmartMeter water meters compared to traditional mechanical meters.
The Village removed a number of old mechanical meters to test their accuracy and establish the potential effect on revenue of a variety of replacement strategies. A weighted analysis against typical consumption, including low (20%), average (65%) and high (15%) flow rates was undertaken on the removed meters.
The meters analyzed ranged from four to 15 years in service with an average of approximately 12 years across a sample of 104 meters. The weighted average accuracy of the meter sample was found to be 89.3 percent, equating to a revenue recovery loss of approximately $8.62 per meter per quarter, or $34.48 per year, based on an average quarterly utility bill of $71.97.
Assuming the sample is typical of the installed base, the theoretical revenue loss for the next 12 months was estimated at $474,273 across the 13,750 meters subject to replacement. In addition to the theoretical revenue losses, the analysis of actual consumption figures highlighted the consistent performance of the SmartMeter water meters in generating revenue compared to the consistent under-registration and progressive loss of performance of the Village’s aging mechanical meters. All SmartMeter water meters installed by the Village demonstrated consistent performance in earnings while the accuracy and revenue generated by the mechanical meters dropped considerably over time.
Rather than focus exclusively on the initial capital cost, potential long term whole life cost savings should also be an important consideration in decision making. In the Tinley Park example if no meters were exchanged, the minimum revenue losses would be more than $474,273 per year. Over three years this would result in a theoretical minimum total loss of revenue of over $1,422,819, which represents a higher value than the cost to replace all of the meters. Typical payback of SmartMeter water meters is roughly three years, depending on the cost and quality of water available.
